The Supreme Court is considering whether the International Emergency Economic Powers Act (IEEPA) grants the President authority to impose tariffs during national emergencies. This moment is not just a legal crossroads — the Court's decision will significantly affect the balance of power in US trade policy and executive action in a rapidly evolving global landscape.

Key Issue: Executive Power vs. Congressional Authority

The central question before the Supreme Court is whether the President can unilaterally levy tariffs under IEEPA, or whether this authority remains with Congress. The government argues for broad executive flexibility to address national emergencies, while challengers maintain that tariff authority is constitutionally reserved for Congress and only explicit statutory language can delegate such significant powers. The Court could definitively uphold or reject broad-based tariff authority under IEEPA; alternatively, the Court could strike a middle ground that permits tariffs under IEEPA in more limited circumstances.

Congressional Response

If the Supreme Court rules against IEEPA tariff authority, Congress may be compelled to clarify its constitutional role — which could take the form of tariff authority modifications, further delegated authority to the Executive Branch, or even legislation that raises US tariff rates. Congressional action will depend on political dynamics and economic considerations. For example, recent projections from the Congressional Budget Office (CBO) show that tariffs enacted this year will generate $2.5 trillion of revenue and reduce the U.S. debt by $3.0 trillion through Fiscal Year (FY) 2035. While this figure includes tariffs under IEEPA as well as other tariff authorities, some in Congress may be tempted to recreate the IEEPA tariffs' portion of that revenue stream — and could face pressure from the administration to do so.

However, the appetite for enacting across-the-board tariffs is far from certain, particularly with midterm elections approaching in 2026. Congressional action on tariffs has historically been contentious, reflecting deep divisions over the economic impact of protectionism, managed trade, and free trade. While some members may advocate for strong tariff measures to address perceived unfair trade practices or national security concerns, others are likely to resist broad tariff authority, citing risks to U.S. consumers, supply chains, and global competitiveness.

If the Supreme Court strikes down the IEEPA tariffs, several scenarios could unfold:

• Congress could move to pass new legislation — either amending IEEPA or enacting a separate statute — to provide explicit tariff authority to the President, potentially with clearer limits and oversight mechanisms, or in the alternative, reclaiming tariff authority.
• Congress could opt for more targeted tariff measures, focusing on specific sectors or countries, rather than blanket tariffs.
• Congress may choose not to act, leaving the administration to rely on existing authorities, which in most cases require agency investigations and have proven legally durable.

Alternative Executive Authorities

Regardless of the Court's ruling, the administration will remain committed to its America First Trade Policy and retains other legal mechanisms to impose tariffs, including:

• Section 232 of the Trade Expansion Act of 1962: Empowers the President to restrict imports that threaten national security, following a Department of Commerce investigation. This tool has seen robust use in recent years.
• Section 301 of the Trade Act of 1974: Allows for import restrictions if the US Trade Representative finds foreign practices "unjustifiable" and harmful to US commerce, with investigations typically completed within 12 months.
• Section 122 of the Trade Act of 1974: Permits temporary import restrictions to address serious balance-of-payments deficits, capped at 15% tariffs for no more than 150 days — though it has never been used.
• Section 338 of the Tariff Act of 1930: Authorizes tariffs up to 50% if another country discriminates against US commerce, potentially contingent on a finding by the International Trade Commission. This authority also remains unused to date.

The administration is likely to use a combination of these tools to maintain its existing tariff policies and to take further trade actions in the event of an unfavorable Supreme Court decision for the government. For example, the administration may seek to quickly reinstate tariffs that are rejected by the Court under certain expedited authorities in the near term, such as Section 122, while launching new trade investigations under Section 232 and Section 301, which would likely result in more durable tariff actions.

Existing tariff actions and ongoing trade investigations under Section 232 and Section 301 will not be impacted by a Supreme Court ruling on IEEPA authority. Similarly, certain trading partners that have reached trade frameworks with the United States over the course of 2025 are not likely to abandon those deals even as the administration may be forced to revisit the authority under which certain provisions of the deals were reached. This may also raise the probability of Congress moving to codify existing trade deals so US trading partners are bound by their commitments.

Engagement and Policy Advocacy Approach

As the Supreme Court weighs its decision on IEEPA, trade stakeholders should proactively engage the administration and Congressional committees, educate policymakers and lawmakers on industry impacts, and advocate for clear, predictable trade policies. Scenario planning is crucial to adapt to shifts in tariff authority. The Court's ruling will drive strategic adaptation for business leaders and policymakers; while some companies may receive refunds if IEEPA tariffs are overturned, the broader business community faces ongoing uncertainty. With the administration likely to turn to alternative trade statutes, vigilance and agility remain essential for navigating future policy changes.